Fortescue Metals Group continue to be a driving force in the Australian iron ore mining industry, despite fluctuating iron ore prices.
There’s no better confidence booster in the WA mining industry when the founding owner pumps back $5 million dollars into his company to buy more shares.
Andrew Forrest, CEO of Fortescue Metals Group has re-invested his own cash back into the business.
As the price of iron ore tumbles in the short-term, the ripple effect is felt far and wide across the WA mining industry. The media is hot to jump on board the news, proclaiming all sorts of doom and gloom across the industry.
Hell-bent on selling newspapers, the media can create negative sentiment in the iron ore industry in Australia, which in turn affects the confidence of the currently employed workforce. Not to mention the tribes of job seekers who have invested in upskilling themselves with the hope of gaining employment in the industry.
Building a solid business
Recovery from the lofty iron ore prices of a year or two are a distant memory for Australian mining companies like Fortescue Metals, who are looking to the future with a solid focus on building a sustainable iron ore mining business.
The share buy-back by Andrew Forrest reflects his personal view and optimism about the future of the Australian mining industry. A view also shared by fellow iron ore mining companies like Rio Tinto and BHP Billiton, who together share vast iron ore mining interests in the Pilbara.
Chinese ports stockpile iron ore
There is of course the overall picture of supply and demand that comes into play. Chinese ports have amassed large stockpiles of iron ore. The inventory of imported iron ore at 43 Chinese ports reached 102.7 million tonnes this month. This is a worrying statistic for many economists and mining companies as they wait to see what China does next in terms of developing its internal infrastructure.
Chinese interest in spot iron ore cargoes appears to be returning. However, many steel mills remain on the sidelines waiting to see if iron ore prices dip any further.
“seasonal pick-up in construction activity this month would revive demand”
Steel prices in China have fallen 7.3 per cent in 2014 and commodity traders are hoping a seasonal pick-up in construction activity this month will revive demand.
It’s estimated stockpiles of iron ore at Chinese ports have increased by around 50 per cent and the amassing of steel has climbed some 88 per cent since December 2013. Surplus stockpiles of iron ore are not what Australian mining companies want to deal with. However, news out of China indicates a steady demand for iron ore, despite the stockpiles.
“breaking even and making a profit”
Triggering all manner of media attention has always been the fluctuating price of iron ore, which at this present time stands somewhere in the region of $110 per tonne.† The volatile swing in the price of iron ore has many mining companies on red alert as they continue to ramp up production, whist at the same time working within the parameters of breaking even and making a profit.
Australian analysts Macquarie Private Wealth made a†prediction that†they envisaged a steady and increasing iron ore price throughout the June Quarter of 2014.
The WA mining industry has adjusted itself over the last 12 months in line with the scaling back of Chinese growth.
Australian workers have been hit hard as cost-cutting measures were implemented and mining companies put projects on hold. Despite this, there are still hundreds and hundreds of jobs in mining in Western Australia. Many are for skilled operators and highly qualified people who seek out a FIFO lifestyle and are prepared to put in the hard yards to earn a sizable income.
What does 2014 hold in store for the future of mining jobs in the Pilbara region of WA? Stay connected to the mining industry by getting the iMINCO Project News delivered at no cost, directly into your email inbox.
This feature-packed newsletter contains helpful and honest information for people who are considering a career in mining – education is the key to discovering the hidden paths to a mining job.